Back up for a moment. All the wireless carriers are investing billions in advanced transmission systems that are fast enough to support popular Internet content offered by the likes of Hulu, YouTube, and Skype – each of which depend on high-quality streaming video. MetroPCS’s own LTE system (for Long Term Evolution) is up and running. But since the whole point of LTE is to offer data-rich service, MetroPCS is facing the same problem as all the other carriers: consumers are going to use more system capacity than they would with older technologies, and some are going to go hog-wild, even watching full length movies on their smartphones. To cover the cost, the carriers must find ways to increase revenues.

Many carriers have adjusted by abandoning unlimited flat-fee service in favor of tiered rates, charging according to usage. Seems fair to us: nobody whines when Mickey D demands three times as much for a Big Mac than for a plain old cheeseburger. And, in any case, nobody is going to be caught with an unexpectedly hefty monthly bill: the FCC insists that the carriers notify users when they exceed their allotted tier of gigabytes—a policy we support.

MetroPCS was apparently loath to muddy its image as a champion of unlimited service. So instead of tiered rates, it offers multiple plans that allow unlimited usage of varying groups of online services, much the way cable TV companies charge for varying bundles of channels. At the high end, $60 a month gets you pretty much everything MetroPCS has to sell – from unlimited international text messaging, to GPS navigation, to 30 Rock episodes on demand. At the low end of LTE service ($40 a month), you still get fast-streaming YouTube and unlimited, high-speed web access, but lose many of the data-intensive services in the high-end plan.

Free Press and a bunch of other watchdog organizations think this violates the spirit of “net neutrality,” as well as the letter of the FCC’s new “open internet” anti-discrimination rules. After all, the $40 plan blocks a variety of fabulous services including NetFlix and Skype while offering services that (in very a limited fashion) compete with them. We’re not lawyers, and thus don’t really know if Free Press has a legal leg to stand on. But we do claim some familiarity with economics and common sense. And by that criterion, we stand foursquare with MetroPCS.

Any MetroPCS subscriber with an advanced smartphone can have access to any wireless Internet service, provided they are willing to pay for it. And if MetroPCS’s rates seem excessive, subscribers can always switch to other carriers. Indeed, unlike most wireless companies, MetroPCS makes switching relatively easy because it doesn’t lock customers into fixed-term contracts.

We hope the FCC gives Free Press the brush-off it deserves.

(This post was also published on Forbes.com.)

In 2007, Comcast, the giant cable company and Internet service provider, faced a marketing problem. A relatively small number of subscribers were hogging huge swaths of bandwidth, as they traded movies and music with others. (Some of the exchange was legal, some of it probably not.) Comcast responded by limiting upload speeds for customers using peer-to-peer networks.

After an investigative reporter from the Associated Press caught the company blocking a transfer of the King James Bible using BitTorrent (leading one blogger to ask, “Why does Comcast hate Jesus?” a couple of advocacy groups, Free Press and Public Knowledge, filed a complaint with the FCC. The agency ordered Comcast to stop.

Three years later, in Comcast v. FCC (PDF), a federal appellate court reversed the FCC’s order. But the court simply ruled that the FCC had overstepped its jurisdiction; it never addressed the legality of Comcast’s behavior.

Comcast, it’s worth noting, could have dealt with its peer-to-peer problem by switching to a pricing model that charged according to use. But the company feared that customers were wed to salad-bar-style pricing and would bolt at the change. Thus, apparently for competitive reasons, Comcast chose instead to block the offending traffic.

Now we can see why. Verizon, which is about to roll out its version of 4G high-speed wireless-data service, says it is planning to charge according to use. Verizon is worried that 4G will make it so convenient to move huge video files over wireless links that it would face a Comcast-like problem, if it didn’t charge by the bucket of data.

Meanwhile, AT&T has beaten Verizon to the punch, announcing that new iPhone customers will pay by the megabyte. (Existing customers with all-you-can-eat plans will be allowed to keep them.)

Verizon’s admission immediately brought forth criticism from the blogosphere. And the FCC wasn’t far behind: it is already preparing new regulations to prevent “bill shock“–you know, when dad finds out that little Jennifer has downloaded every episode of “True Blood” and “The Vampire Diaries,” and stuck him with a $400 cell phone bill.

The irony, of course, is that Comcast ran afoul of the FCC, in part, for failing to use tiered pricing to ration bandwidth. Now, apparently, Verizon has caught the FCC’s attention by deciding to charge according to usage.

The FCC may do no more than require carriers to notify customers when they’ve exceed their allotted megabytes–something AT&T is apparently planning to do, even without a nudge from Washington. Still, we’d much prefer that the FCC stay out of data-service-pricing decisions altogether, letting the carriers adjust to changing technology and market conditions.

Telecommunications markets don’t always get it right. But we doubt that the regulators could do better.

(This blog post was published earlier on CNET.)